London, March 26, 2026, 16:49 GMT
Shares of Diageo ended Thursday up 1.16% at 1,393 pence, following news that United Spirits—its Indian subsidiary—is set to offload Royal Challengers Sports, which owns the Royal Challengers Bengaluru cricket teams, in a 166.6 billion rupee ($1.78 billion) deal.
Investors have been pushing new chief executive Dave Lewis to bring in cash and repair the balance sheet, especially after he slashed Diageo’s interim dividend last month and trimmed fiscal 2026 organic sales guidance to a drop of 2% to 3%. Organic sales exclude the effects of currency moves and acquisitions or disposals. Results showed net debt hit $21.7 billion at December’s close.
United Spirits said the sale includes both the men’s IPL side and the women’s team, following a strategic review of what Diageo previously called a non-core asset for its alcohol portfolio. The deal still needs to clear several conditions and get the green light from India’s cricket board and the country’s competition regulator.
Lewis hasn’t minced words about shaking loose some breathing room. Back in February, he called for “more financial flexibility” at Diageo and hammered home the mantra—“customer, customer, customer”—as he overhauls the group’s category strategy and operating model. Diageo
The pressure is rooted in business fundamentals. Diageo reported a 2.8% drop in first-half organic net sales, citing sluggish demand for U.S. spirits and persistent softness in China’s baijiu market—Chinese white spirits made from grain. Operating profit before exceptional items matched the sales decline, also down 2.8%.
Analysts aren’t rushing in. “The repair job is massive,” said Dan Coatsworth, head of markets at AJ Bell. Hargreaves Lansdown’s Aarin Chiekrie echoed the note of restraint, writing that “some caution would be wise” until demand shows signs of picking up. Reuters
Thursday’s uptick trims losses but doesn’t erase them. Diageo shares still ended the session well under their 52-week peak of 2,214 pence, sitting just a bit higher than their 52-week low at 1,351 pence, according to Hargreaves Lansdown data.
It’s not just Diageo feeling the heat. Pernod Ricard flagged softer sales and profit numbers in its key regions back in February, with the U.S. and China dragging. But over at Brown-Forman, which owns Jack Daniel’s, results in early March topped Wall Street’s forecasts as whiskey and ready-to-drink offerings continued to pull in buyers.
Right now, investors are clinging to disposals as something solid. But the RCB sale isn’t done—the deal needs to clear approvals first. Lewis plans to pitch a refreshed strategy to the board in the second quarter, then go public with it in the third. Until then, soft U.S. demand, tariffs, and execution risks remain a drag.
